Analysis On The Rural Labour Non-agricultural Employment Affected By Minimum Wage Law

The rural labor is a new labor group who exists in our country reform and open policy and the industrialization advanced, they have made the tremendous contribution for our country economic and the social development. But the rural labor has weak status in labor market, specially the inexpensive wages cause their rights and interests to be very difficult to obtain the safeguard, therefore, it is very important for the government to protect the rural labor's rights and interests, and the government worked out the minimum wage system which is to improve the underlying labor force's income, but carries it on the labor market to display the government's function. This article is for the purpose of analyzing the minimum wage system, and discuss the influence of the minimum wage system to the rural labor's employment, and analyzes the reason.By reference to domestic and overseas theories and research methods, explaining from the economics perspective, this paper analyzes the rural labor employment effect of minimum wage law both in theoretical and empirical perspective.According to Mincer's two sector model, the economy can be divided into the minimum wage covered sector and the non-covered sector. these are some reasons that lead to non—negative employment effect of minimum wage law in rural labor market, as the lower equilibrium wage,the lower minimum wage,the smaller demand elasticity,lower vacancies. The above hypothesis is subject to empirical test by constructing fixed effect model. The conclusion is that the employment effect of minimum wage is positive. One reason is the positive policies which raise the minimum wage and lead to increases the employment of rural labor. The other reason is that the minimum wage and the rural labor's wage are lower, which lead to decrease cost in the total cost of firms. Because the rural labor employment effect of minimum wage is positive, the government should raised the minimum wage and take step to strengthen and improve the minimum wage law execution in order to protect the interests of the rural laborer practically.